The enclosed statement of the Reichsbank, Department for national Economy [Volkswirtschaftliche Abteilung], of the capability of France is submitted for your information.

To this the Reichsbank remarks as follows:

"The statement deals solely with the effect of an increase of the occupation expenses through levying on the French budget in regard to economy and currency.

"It is an entirely different question, however, how to act in practice in the face of the imperative military necessities.

"The Armed Forces' money requirements must be supplied in any case-either through the budget of the French Government or in the form of an advance from the issuing bank or in any other form of financing; otherwise it would be necessary to issue Reich Credit Bills [Reichskredit Kassenscheine], which is undesirable."

To: The German Armistic Delegation for Economy in Paris
per (signed:) DUMONT
[pencil notation:]
The German Embassy in Paris
Occup. SECRET
-each separate-
Copy to be attached to Ha Pol. 7563/42 g
Berlin, 7, December 1942

SECRET:

German Reichsbank
Department for National Economy

Concerning the question of an increase of French contributions to the Occupation expenses.

Altogether the burden for France hitherto as an effect of the Armistice is nearly 18.5 billion marks or 370 billion francs.

France therefore has transferred the greatest part of her payments (17.6 billion marks) in the form of goods and labor.

Anyhow the conclusion is obvious that the French National Economy has been taxed more heavily since the Armistice in June 1940 than Germany was after the World War.

Since the French contributions for the occupation expenses could not be covered by taxes, they had to be financed in part from the proceeds of the issuing of treasury bills, but mostly by credit from the bank of issue.

Whether the economic exploitation of France could be intensified by raising the daily contributions to the occupation expenses from 15 to 25 million marks for the rest of the War seems to us-as far as we can judge from here-rather doubtful for the following reasons:

Under these circumstances the French Government would be obliged to utilize the credit of the bank of issue to still greater extent than hitherto in order to finance the demands for increased occupation expenses.

Inflationary rises in prices and wages in France would cause very grave disadvantages for Germany.

Such a measure also seems very problematical in regard to the goods [gueterseite] in French national economy.

With the loss of a large part of French imports, industrial production as well as the capacity of France to supply us with food will have to be further reduced in the future. Such a great weakening of French economic power is to be reckoned with that it does not seem to make much sense to raise the expenses of the occupation.

An increase in French contributions to the occupation expenses could be advocated, however, only if there were a corresponding chance of raising her production ability [Sachleistungen].

Source:
Nazi Conspiracy and Aggression Volume IV
Office of the United States Chief Counsel for Prosecution of Axis Criminality
Washington, DC : United States Government Printing Office, 1946